Low-cost wine sales in rural India to touch Rs 500 cr by fiscal-end

Published: Wednesday, January 2, 2008, 15:33 [IST]

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New Delhi, Jan 2 (UNI) With the consumption of low-cost wines growing rapidly, especially among younger rural generation, the segment is expected to touch the Rs 500-crore mark by March 2008, said a study.

In a study by industry chamber Assocham, the total wine sales pan-india is expected to exceed Rs 1,400 crore by March 2008.

The change in consumption pattern has been primarily because of health reasons as a large segment of younger and elderly population are deviating from their earlier hard liquor drinking habits to wine.

''As a result, the wine industry as a whole has been growing at an average rate of 35 per cent as against less than 20 per cent about 4-5 years ago,'' the study says.

The total wine sales upto December 2007 countrywide has been estimated at about Rs 1,000 crore, with the low-cost segment contributing about Rs 300 crore. ''In the next three months, the wine sales is anticipated to touch levels of about Rs 1,400 crore,'' said Assocham President Venugopal N Dhoot.

As the urban youth, in recent times, has taken to larger wine consumption, the rural youth and its younger lot have also developed a yearning for larger wine intake as a result of availability of low-cost wine manufactured, especially by domestic wine manufacturers in states like Maharasthra, Andhra Pradesh, Karnataka, Punjab, Himachal Pardesh and Jammu and Kashmir, the study says.

By end of the current fiscal, over 8.5 million litres of wine sale is likely to be concluded, of which the rural intake is estimated to be at over 3.5 million litres, said the Assocham Chief.

By mid-December 2007, about 6.5 million litres of wine sales has been reported in which the rural segment low-cost wine sales is estimated to be about 2.75 million litres, the study added.

Wine sales in 2005-06 comprised 6,50,000 cases, which grew by 55,000 cases in the following year of 2006-07 and until December 2007, the wine sales has been estimated at about 8,00,000 cases.

Of the total wine sales, the import element was to the extent of 45 per cent, with France and Italy accounting for about 15-30 per cent share.

While the liquor industry is growing at a rate around 10-12 per cent, the growth rate of the wine industry is more than three times higher as a result of the demand factor, despite fragmented social campaign to discourage wine and liquor consumption, the study says.

Indians consumed nearly 220 million cases of beer and 60 million cases of whisky and other spirits in fiscal 2005-06.

Its consumption quantity grew by nearly 10 per cent in 2006-07 to reach over 240 million cases of beer and about 70 million cases of whisky and other spirits.

The chamber observed that wine is gaining popularity in the country as the cost for opening and setting up of vineyards with capacity of around one lakh litres comes only to somewhere between the Rs 1-1.5 crore mark. As a result many entrepreneurs, Indian and foreign, are entering in this sector, the study says.